The appreciation that individual susceptibility to type 2 diabetes (T2D) and related components of the dysmetabolic syndrome has a strong inherited component provides a coherent framework within which to develop a molecular understanding of the pathogenesis of T2D. This review focuses on the main approaches currently adopted by researchers seeking to identify the inherited basis of T2D and the present state of our knowledge. One central theme that emerges is that progress in defining the genetic basis of the common, multifactorial forms of T2D is hindered by etiological heterogeneity: T2D is likely to represent the final common pathway of diverse interacting primary disturbances. Such heterogeneity equally compromises efforts to understand the basis for T2D by use of other approaches, such as cellular biochemistry and classical physiology. Analyses that seek to ally sophisticated physiological characterization with measures of genomic variation are likely to provide powerful tools for redressing the loss of power associated with such heterogeneity.